The South Korean credit card payments market is forecast to grow by 6.3% in 2024 to reach KRW1,017.1trn ($778.9bn), supported by high consumer preference for electronic payments, according to GlobalData, publishers of EPI.
GlobalData’s Payment Cards Analytics reveals that credit card payment value in South Korea registered a growth of 13.5% in 2022, driven by a rise in consumer spending. However, the value registered a slow growth of 6.9% in 2023 to reach KRW956.7trn ($732.6bn), due to a slowdown in the economy.
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Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “South Korea’s credit cards market is well-developed, supported by a strong banked population, high consumer awareness, banks incentivising customers via a range of benefits, and government support to boost cashless payment methods to drive payment card adoption in the country. With the necessary payment infrastructure in place, including well-developed point-of-sale (POS) infrastructure, consumers are gradually becoming more aware of the benefits of credit cards.”
Credit cards dominate South Korea’s payment card market, accounting for estimated 79.9% of card payment transaction value in 2024. This is due to banks’ flexible repayment options and value-added benefits such as cashback, discounts, installment facilities, and reward programs, coupled with the government offering tax benefits on credit card spending. Credit card holders receive tax benefits if they spend the equivalent of 25% of their annual salary on credit cards.
Annual credit card payment usage frequency increased from 125.6 times per card in 2020 to 145.4 in 2024. This trend is expected to continue over 2024–28.
With a well-developed point-of-sale (POS) infrastructure in place, consumers are gradually becoming more aware of the benefits of payment cards. The POS terminals per million inhabitants in South Korea stand at 65,355 in 2024, which is among the highest in the Asia-Pacific (APAC) region.
The rise in e-commerce payments also contributed to the growth of the payment cards market, as credit cards are the most preferred payment tool for online purchases. Credit cards alone accounted for almost half (48.5%) of the total e-commerce transaction value in South Korea in 2023, according to GlobalData’s 2023 Financial Services Consumer Survey.
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By GlobalDataSharma concluded: “While South Korea’s credit card payments market has been on a growth trajectory, it continues to face challenges such as uncertain economic conditions and rising inflation. Overall, the credit card payments value is expected to register a slow compound annual growth rate (CAGR) of 5.7% between 2024 and 2028.
